Monthly Market Snapshot: May 2023
Pavilion Real Estate in Cookstown
16th June 2023
Commenting on the housing market, Jordan Buchanan, Chief Operating Officer at PropertyPal stated:
“The Northern Ireland housing market exhibited another cautiously optimistic performance in May, as around 2,400 properties were marked as ‘sale agreed’, which is an 8% decrease compared to pre-covid levels. Listed prices have continued to follow similar trends to the broader inflationary environment, experiencing increases of 7.7% and 8.6% respectively over the past 12 months. Encouragingly, properties are still being transacted at a faster pace than usual, with an average of 43 days to reach the ‘sale agreed’ stage, in contrast to 49 days during the period of 2017-2019.
Nevertheless, the resilience in the labour market, characterised by strong wage settlements, presents a quandary for the Bank of England as they focus their efforts on taming inflation. Consequently, financial markets are now anticipating several additional base rate hikes, expected to peak later this year at around 5.5%-6.0%. Lenders have swiftly withdrawn deals and repriced products, which will inevitably weaken confidence among both mortgaged homeowners and first-time buyers entering the market, as they contend with payment shocks and heightened affordability concerns. This remains the most concerning factor weighing on the market outlook. However, if the underlying inflationary issues were to subside, although not certain, it would likely lead to a pause in the interest rate regime, if not a reduction, and could rapidly improve the economic mood.”